Explanation of Field

      My name is Bryant Sanderson and I am majoring in Agricultural Economics where I plan to be a grain merchandiser or a price and risk analyst for a major grain company. In this field the major point of emphasis is the commodities that are being bought and sold on the grain markets. The grain markets trade future prices of a commodity, such as corn, months and years in advance so people who buy and sell the commodities know what they are worth. This helps the buyers and sellers avoid the risk of price difference.

The grain futures markets are influenced by many factors such as the environment, time of year, hedge funds, United States Department of Agriculture reports, demand for commodities, and many more. There are many commodities that are traded on futures exchanges but the main four in this area of the world are soybeans, corn, and spring and winter wheat. There are three main exchanges in the U.S. that trade these commodities. One is the Chicago Board of Trade which trades corn, soybeans, and other grains. The other two are the Kansas City Board of Trade, which trades winter wheat, and the Minneapolis Grain Exchange, which trades spring wheat. Farmers sell these commodities to grain merchandisers at grain elevators and the elevators will ship them off to processors. The processors will then sell to grocery stores and other businesses as a final product for consumers.
           As a grain merchandiser, I would be working for a grain elevator or a processor buying and selling grain. If I were to work at an elevator, I would buy grain from farmers and other elevators and then sell to processors. If I were to work at a processor, I would buy grain from farmers and grain elevators and I may or may not sell the product depending on the company’s capabilities. A grain merchandiser's main focus is on the grain markets because they can take advantage of price decreases or increases. In order to make money a grain merchandiser includes a basis in their buying price to cover costs such as transportation, storage, interest, and profit margin. The basis is an important aspect in buying and selling grain that can make trader’s money or lose them money.

There is a strong set of beliefs in the people who work in this industry. All who participate in buying and selling grain feel that they are providing people with food, energy, and strong support for the nation’s economy. Needless to say it is a proud group of people, but they feel that way because they work hard and love what they do. Aside from the natural attitude of the industry, there is terminology that is different and complex from any other industry. Grain merchandisers need to understand the terminology, the grain markets, and understand their financial status in order to make sound decisions.

 As a price and risk analyst, I would be forecasting the grain markets for a company that they will use to base their buying and selling decisions from. A price and risk analyst would also address the susceptibility to risk for the firm they are working for by analyzing inventory and grain prices. To be a price or risk analyst, a person will need to at least get a master’s degree to acquire the necessary skill set. A price and risk analyst is most interested in the firm they are working for and how the firm can make the highest profit based on the futures markets. The purpose of a price or risk analyst is to assist the firm in avoiding losing large amounts of money based on the fluctuations of the futures markets and the grain they buy and sell.